|User pays is a great way to treat customers. In the democratic political world, the hippie commune approach to life is the norm [which ends like Greece when opm runs out, with producers paying for bludgers and free-loaders hanging on wherever they can get a grip]. A fixed $30 a month charge is not recognizing individuals and their individual requirements and charging them accordingly. It's a one-size-fits-all, arpu-style, Kremlinized way of thinking. |
So let's build a network and when a customer shows up, let's figure out how much to charge them. Hey, here comes one now [a customer]. "Hi, I saw you just built a great-looking network. Can I use it please?"
"Sure, we want swarms of customers, quickly, because we built a pretty big network which cost umpty$billion and it's depreciating quickly towards obsolescence."
"I've got an iPad, iPhone, a voice-only DeVice, a car-phone, a netbook, a Kindle and one of those new mirasol things. Can your network work with all those and deliver fast data so I can watch videos, send email with big attachments and has it got really low latency so I can conduct voice conversations and video without that really annoying lag that some networks cause?"
"Yes, our network can, but you'll need to open an account for each DeVice and that's $50 a throw. Then you'll need to pay $30 a month but it's eat-all-you-like data unless it strangles after 2GB. So that'll be 7 x $50 + 7 x $30 a month = $560 [plus taxes] to start and you'll need to pay $210 each time the moon goes around whether you use any data or not on each DeVice. "
"Are you totally out of your mind? What does the moon have to do with it? And mostly I just use my iPhone, just connecting with those other DeVices now and then. I don't want to pay $30 a month to read a couple of magazines on my mirasol at the beach."
"Well, we have to amortize our network and we haven't got a lot of customers as you can see. You are the first. So we have heavy amortization costs. And we have to manage your account every month too. Plus we have got big salaries, flash offices, and you can go in a draw to win some discounted megabytes and play some on-line games our MBA marketing gurus said you'd love to do to earn more air-miles which are easily understood after a couple of days of reading."
"Look, I just want to buy data when I want it, where I want it, and I just want one account which I will even prepay so you don't have any credit risk. So why don't I give you $20, and you provide me with 2GB which I can use on any of my DeVices any time? When I am running low on my allocation, I'll put more money in and you can allocate me another 2GB. And I don't want any lucky draw rubbish, or air-miles. If I wanted air-miles, I'd go to a travel agent. I just want my DeVices to get data."
"Well, who is going to pay our air-miles team and the lucky draw marketing plan development and the MBA marketing courses? And how are we going to amortize those $billions?"
"Why don't you put a sign on your website saying "Really cheap unstrangled data. Only 1c per MB. No marketing muck to wade through. No horrible pricing "plans" to figure out. Click here to buy credit." Then you'll get millions of people buying credit and using your network. You can just sit on the beach with a mirasol screen and download the money. The computers will do the rest. They don't go on strike or cause sexual harassment legal problems. There's no gender discrimination or EEO stuff to comply with. Your marketing teams can get real jobs more attuned to their talents."
"Groan. You don't understand. We are not allowed to commoditize our product. Price destruction is bad. We need arpu and lots of it. Fortunately, there isn't much competition and they went to the same marketing schools, so you are stuck."
"Okay, it seems that I'll have to just stick with wifi and you can get on with your marketing blather and amortization. Hey look, here comes another customer with a bag full of electronics. Good luck with them. Bye."
There isn't a cost in "managing the account" in electronic DeVice comunication. It's all done by computers which can handle umpty megabits per second of connection and monitoring data. The computers get a connection, check that the person has credit in their account, then turn them loose on the data, counting packets until the credit is used up. The person then has to buy more credit. They don't go to a shop and take up space and talk to a person, thereby costing money, meaning there would have to be a charge. They just buy more credit on-line, with computers handling the transactions.
PS. Thanks for the reports about actually using mirasol.